Summary of this article
All six MPC members supported keeping rates unchanged.
West Asia conflict increased uncertainty over growth, inflation.
RBI chose caution amid monsoon and price risks.
The Reserve Bank of India (RBI) has released the minutes of its monetary policy committee (MPC) meeting held from June 3-5, 2026, showing that all six members voted to keep the repo rate unchanged at 5.25 per cent and retain the neutral policy stance.
All members of the MPC preferred a wait-and-watch approach because of uncertainty surrounding the economy, according to the minutes of the meeting. Policymakers discussed risks linked to the conflict in West Asia, supply chain disruptions, and commodity prices and weather conditions, all of which could shape the inflation and growth outlook in the coming months.
The committee had announced its policy decision on June 5, 2026, when it left the benchmark rate unchanged and retained the neutral stance.
Inflation Outlook Remains Uncertain
According to the minutes, members felt that the inflation projections were subject to several uncertainties. The minutes point to the ongoing conflict in West Asia, movements in energy and commodity prices, and the progress of the monsoon as key factors that need close monitoring.
Policymakers had also discussed the rise in wholesale price inflation (WPI) and noted that more time was needed to assess whether higher input costs would pass on to consumer prices.
Food inflation continued to be an issue of concern. The members noted that the timing and amount of rainfall during the monsoons would be crucial to crop yields and food costs.
The committee determined that a policy change would not be wise at this time due to the lack of sufficient information.
Global Risks Influenced MPC Discussion
The West Asia conflict was a prominent part in the committee’s discussions, according to the minutes. Members indicated that the length of the conflict was an unsettled issue and could affect inflation and growth.
The prospect of elevated energy costs and disturbances in global supply chains were also cited by policymakers. These risks led the members to prefer to take a conservative stance and emphasise the importance of keeping monetary policy flexible.
The neutral stance was seen as providing room for action if economic conditions changed significantly in either direction.
RBI Lowers Growth Projection
The release of the minutes follow the RBI’s June policy review, in which the central bank lowered its real gross domestic product (GDP) growth forecast for 2026-27 from 6.90 per cent from 6.60 per cent projected earlier. The estimate is also below the 7.60 per cent growth expected for 2025-26.
The RBI has projected inflation at 5.10 per cent for 2026-27 and has highlighted risks arising from geopolitical tensions, rising input costs and weather-related uncertainties.
